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Friday, July 23, 2010

The annoucement

The announcement finally made the papers today that Svitzer Canada and Atlantic Towing have formed a joint venture for port tug services in Nova Scotia. Svitzer will handle the Strait of Canso and Atlantic Towing will handle Halifax.

There is a sad note to this, in that Svitzer and its predecessors Eastern Canada Towing, Foundation Maritime and Halifax Towboat, going back over a period of over a hundred years, have provided tugs continuously in Halifax and from the same location.There is also an irony as well, for it was the original Gulf Oil refinery in Point Tupper (which is now the NuStar terminal, and no longer a refinery) and the Shaheen refinery in Come-by-Chance, Newfoundland, that brought Smit &Cory International to Canada. Smit & Cory formed Eastern Canada Towing (Ectug) and acquired the assets of Foundation Maritime in 1971. Smit eventually bowed out of the partnership and Cory was eventually taken over by Wijsmuller then Svitzer.

It was obvious when Atlantic Towing made the move into Halifax five years ago that something would have to give. Neither company was making enough money to support the number of tugs here. There were as many as eight tugs here at one time, but for the first year or two it was a standoff as Irving syphoned off more and more business from Svitzer.Eventually both companies found a way to cooperate to "borrow" each others tugs as needed so that ships were always served. But there was still far too much idle time for tugs and crews.Svitzer found some outside work for some of their tugs, such as winter work in Freeport Bahamas for Svitzer's parent company. But this was certainly less than successful last year when Point Halifax was seriously damaged in ice in the Belle Isle Strait and Svitzer Bedford had an engine room fire off Quebec City.

The new joint venture will put Svitzer in as operators at NuStar in Point Tupper - a fit that is better for the parent Svitzer, which specializes in terminal tugs around the world. Svitzer needs at least one new tug, but could not support such an investment based on current business in Halifax. Their businesses in Baie Comeau and Sept-Iles suffered from the recession and both also need investment in new tugs. Perhaps with the losses in Halifax now at an end, they can begin to plan for that. It seems likely with this new announcement that Point Halifax, when it is again operational, will be deployed in Point Tupper and Quebec, as Svitzer will have no presence in Halifax.

Atlantic Towing very much wants a presence in Halifax due to their parent Irving's shipyard and the tanker traffic here, much of which services Irving Oil, directly or indirectly.As the only tug operator in Halifax, they will need four or more tugs here. It will be interesting to see how they accomplish this as their resources are spread fairly thin now.

Svitzer will be sending Point Chebucto, Svitzer Bedford and Point Valiant off to Point Tupper next week. As of today Atlantic Towing has only Atlantic Oak in Halifax.